As the largest cryptocurrency on the market, the long-term Bitcoin forecast is a hotly debated topic. Opinions and predictions could not be more different.
Which assessment is correct, and how will the Bitcoin price develop in the future?
Bitcoin price forecast of the analysts
The American bank JP Morgan was considered a Bitcoin critic for a long time but has since repositioned itself and is working on its own cryptocurrency. At the start of the new year, JP Morgan published an extensive study in which a forecast was made for the future price trend. According to the study, even the current record level is only a snapshot. The analysts expect an increase to up to 146,000 US dollars. As a reason, the financial institution cited the billions of dollars in shifts from gold into Bitcoin and Co. Analyst Nikolaos Panigirtzoglou explains in this context that there will be competition between gold and the leading digital currency.
JP Morgan also sees the upcoming generation of young investors as an important factor. For many of these investors, bitcoin is already part of their investment strategy. Future investors are actively growing up with the cryptocurrency developed by Satoshi Nakamoto, and for them, the “digital gold” will be a welcome alternative to the physical commodity. The bank bases its price target of 146,000 US dollars on an alignment of gold and BTC. Since October 2020, around 7 billion US dollars have flowed out of gold ETFs. In the same period, the well-known Bitcoin Trust of the asset manager Grayscale alone rose by 3 billion US dollars.
New major investors
The news surrounding the company MicroStrategy, which invested almost 1 billion US dollars in BTC, caused a stir in recent months. First, the software giant shifted 450 million US dollars from its reserves into BTC. A few weeks ago, the United States company announced that it was issuing bonds for another 650 million US dollars. The fresh capital is then also to be invested to a large extent in BTC. MicroStrategy’s share price has risen sharply in recent days. This is mainly because the company’s managers' investment strategy has already ensured profits in the triple-digit millions.
But it was not only the software company that entered BTC on a grand scale. MassMutual, one of the largest American insurance companies, did the same to MicroStrategy. Founded in 1851, the company invested 100 million US dollars in BTC. In this context, MassMutual took a stake in the New York Digital Investment Group (NYDIG). NYDIG is the crypto custodian of the asset management company Stone Ridge. MassMutual invested USD 5 million in NYDIG. The custody service provider will take over managing the insurance company’s new crypto assets in the same move.
The news of the payment service provider PayPal that it wants to offer its own service for cryptocurrencies caused euphoria on the crypto markets. This simplifies access to many cryptocurrencies enormously. As a result of the news, the bitcoin price experienced a 15% increase. Due to the acceptance by one of the largest payment service providers and the generally positive overall environment, Jehan Chu, founder of Kenetic Capital, still expects prices above 20,000 US dollars in 2020. Currency strategist Joel Kruger of LMAX Digital also believes in such a rise and expects 30,000 to 40,000 US dollars in 2021.
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Bitcoin general facts
Bitcoin (BTC) launched its Genesis Block in January 2009. An unknown person or group founded the open-source project under the name Satoshi Nakamoto.
The goal of Bitcoin is to allow users to store or transfer money to others without relying on centralized third parties such as financial institutions or governments. People should once again have full control over their assets.
Since its inception, Bitcoin attracted a lot of attention and was praised for its potential to compete with VISA as a global payment option.
After the value of Bitcoin rose almost continuously for 5 years, the first damper came. It gradually became apparent that limited network capacity was becoming a problem.
Since then, scalability, as with many other blockchains, was a hot topic. During the bull run, transaction fees also rose rapidly, making Bitcoin less attractive. Especially in the micro-payment sector, fees of sometimes US$40 made smaller transactions unprofitable.
Bitcoin solved the problem with Segregated Witness (SegWit). On 23 August 2017, the SegWit network upgrade (Segregated Witness) was implemented. It significantly increased the Bitcoin blockchain's capacity and improved its position against competing for high-throughput blockchain technologies. Bitcoin was also one of the first blockchains to implement a second-tier scaling solution with the Lightning network. The Lightning network is widely considered to be the second half of the solution to Bitcoin’s scaling problems first addressed with SegWit.
Bitcoin forecast: what do the experts say?
Opinions on Bitcoin and the long-term Bitcoin forecast vary widely. Below is a list of some (alleged) blockchain experts and famous personalities on the price development of Bitcoin:
Bill Gates: The Microsoft boss has never made a secret of his attitude towards Bitcoin. Gates does not want to give exact dates or figures, but in his opinion, Bitcoin will end up at 0 US$ sooner or later. That means he believes the price will implode and Bitcoin will crash. His reasoning for this radical assessment is that Bitcoin as an asset class does not produce anything that would justify an equivalent value. Therefore, in his eyes, it is purely a matter of speculation that will eventually peter out. Joe Davis, head of Vanguard’s investment strategy group, has a similar attitude. For him, Bitcoin is not an attractive store of value because of its high volatility.
Kenneth Rogoff: Rogoff is a professor at Harvard University and former head of the International Monetary Fund. In a CNBC interview, he commented on the Bitcoin forecast and gave a personal estimate for 2028. In his opinion, BTC will only be worth about US$100 by then. He also argues similarly to Gates and bases his Bitcoin forecast on its relatively limited uses as a transaction means. In his opinion, Bitcoin would hardly pass as an attractive transaction tool except for money laundering or tax evasion.
Cameron Winklevoss: The Winklevoss twins Cameron and Tyler are well-known personalities in the Bitcoin scene. Within a short time, they were able to generate a net worth of over US$1 billion. Cameron Winklevoss estimates that the Bitcoin price will be around US$ 320,000 in 10 to 20 years.
John Pfeffer: The Pfeffer Capital Partner did not give an exact timeline for his Bitcoin forecast. He believes that BTC could exceed US$700,000 in value when it replaces gold as a store of value. He explained why he came up with this figure in particular by doing a simple calculation. Pfeffer assumes that gold bars worth US$1.6 trillion are held privately. This compares to 18 million Bitcoin that he believes will still be in circulation at that time. This would result in a minimum price of US$90,000 per Bitcoin. This value could then rise further over time to eventually end up at US$700,000. However, Pfeffer’s assessment would only come true if Bitcoin actually replaced gold as a store of value.
John McAfee: Security software developer John McAfee caused quite a stir with his Bitcoin forecast for 2020. His estimate of US$1 million for 1 BTC is not only very high, but he seems so convinced of it that he calls anyone who disagrees with him an idiot. For another 1 to 2 years after that, he can even imagine that 1 BTC could be worth over US$2.6 million. McAfee has been criticized in the past for aggressively valuing the assets he trades.
BayernLB: A study by the Bayerische Landesbank from the end of 2019 considers it possible that the Bitcoin price could rise to US$90,000 in the following year. This statement has caused quite a stir in the crypto world, as it is the first time that a reputable German institute has allowed itself to be carried away by a Bitcoin price forecast. The basis of this price forecast lies in the commodity analysis technique “stock-to-flow.” It is precisely through Bitcoin halving that the price of one Bitcoin is expected to increase sharply.
Bitcoin Forecast 2021–2024
Now that some experts and personalities have commented on the Bitcoin forecast, here is an assessment based on mathematics and algorithms:
Longforecast.com: The Bitcoin forecast is given here over a period of several years. According to the calculations, the Bitcoin price will experience some fluctuations until 2023, but the general trend will continuously rise. In January 2023, 1 BTC will be worth up to US$61,604. According to the Bitcoin forecast, a slight correction will follow between 2023 and 2024, before a bull run to almost US$80,000 still follows in 2024. This trend continues into 2025, according to Longforecast.com.
Walletinvestor.com: Even the otherwise rather pessimistic experts at Walletinvestor.com expect the price to rise significantly in the future. According to them, in 2022, the price will rise significantly above 40,000 US dollars in large parts of the year. In the following year, the bitcoin will test a level of around 50,000 US dollars for the first time, according to the forecast. This trend will continue in 2024 and 2025. Walletinvestor expects a Bitcoin price of over 68,200 US dollars by 2025.
Conclusion on the Bitcoin forecast
No one can be sure where the Bitcoin price will march or even crash. The listed forecasts of the experts and institutions are well-founded and comprehensible.
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